Celestia Team Rethinks Consensus Algorithm Amid TIA’s Historic Low

On June 22, the native coin of the modular blockchain Celestia (TIA) hit a historic low of $1.32, marking a 92% decline from its peak price of $20.85.

Community panic was fueled by rumors of potential internal manipulations and insider trading within the project team. A user named 0xCircusLover accused Celestia of conducting several over-the-counter sales and coordinating high-paid “stooges” to promote TIA on social media.

He speculated that the blockchain’s management had been selling tokens since October 2024, which were previously vested. The total value of the assets was estimated at around $1 billion at that time. 

Celestia co-founder Mustafa Al-Bassam refuted 0xCircusLover’s claims, calling the situation FUD. He asserts that “all founders, early employees, and core developers are still here and working hard.” 

Despite the FUD (which is getting more ridiculous by the day), all Celestia founders, early employees and core engineers are still here and working as hard as we did when Celestia started 5 years ago.

So say that Celestia did 9/11 for all I care or whatever FUD you want, I’ve… https://t.co/lvYDO9bqUn

— Mustafa Al-Bassam (@musalbas) June 23, 2025

According to Al-Bassam, 95% declines occur in the lifecycle of most coins. Meanwhile, Celestia still has funding: 

“We have a war chest of $100 million and a six-year runway, so we are ready to play the long game.”

Addressing Issues

In response to user dissatisfaction, another Celestia co-founder, John Adler, sought to resolve on-chain network issues. He proposed replacing the Proof-of-Stake consensus algorithm with an experimental Proof-of-Governance.

The new mechanism aims to reduce the issuance of new coins by 20 times and eliminate complex liquid staking tokens.

Adler clarified that the proposal seeks to decrease emissions from 5% to 0.25% without compromising security, creating a fairer system for earning passive income. 

“While the net issuance for token holders is zero, validators are paid real issuance for delegation,” the proposal states. 

Under Proof-of-Governance, token holders will be able to select node operators without the need to lock up coins, although such users will not receive rewards.

Following the proposal’s publication, the TIA price rose by approximately 10% to $1.65. 

Back in May, Movement Labs announced the dismissal of co-founder Rushi Manche due to a scandal involving market makers and token MOVE price manipulation.